Combined Heat and Power in Integrated Resource Planning: Examples and Planning Considerations

November 1, 2020

Significant potential exists for increasing Combined Heat and Power (CHP) installations across the U.S. While about 81 GW of CHP capacity is in operation today, an estimated 149 GW of technically viable capacity remains to be developed. CHP can help:

  1. Provide efficient and reliable electricity and thermal energy to the U.S. industrial sector
  2. Increase our power system’s resilience to support our nation’s critical infrastructure
  3. Support grid integration of wind, solar, and energy storage technologies
  4. Reduce carbon dioxide and other emissions while keeping electricity prices lower.

Combined Heat and Power in Integrated Resource Planning: Examples and Planning Considerations assists state-level policy makers, state energy offices, utility commissions, and utility system planners in exploring the role of CHP in integrated resource planning (IRP). When developing plans for future resource options, utilities can gain value from evaluating CHP as a grid resource on the supply side, as an energy efficiency resource on the demand side, or as an overall resource solution. Examples of utility consideration of CHP in IRPs show that some utilities indicate a preference for owning CHP assets, while others do not take a position on ownership in their consideration of the costs and benefits of CHP.

This report provides examples of how states are encouraging consideration of CHP in integrated resource planning and how utilities operating in three states – North Carolina, South Carolina, and Indiana – explicitly evaluate CHP as a supply resource option in their plans. The report concludes with approaches to characterize CHP in IRP including modeling parameters and other assumptions, and considerations for states and utilities interested in exploring how CHP can support a least-cost utility resource portfolio.

Cover image of the CHP in Integrated Resource Planning report.

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